Study Shows Analogs Still in Vogue

Is there room in today's high tech
information age for good, old fashioned geologic analogs?

Yes. And then some.

That's the finding of a study that asked 23 various
companies around the world just how important analogs are to the
modern geoscientist.

"We wanted to find out if the concept of geologic
analogs is still a favorable approach today and if people are just
using seismic data and well log information to do their interpretations,
or if we just don't have a handle on how people actually use analogs,"
said J.C. Wan, director of technology development with Houston-based
C&C Reservoirs.

C&C contracted with Quittitut Consulting to assess
the real world use and methodology of geological analogs in general,
and digital analog systems in particular.

The goal: To determine the merits and effectiveness
of the analog approach in exploration prospecting and field development.

Participants were six major oil companies, nine international
independents, two national oil companies, four domestic independents
and two independent exploration geologists, all covering six countries.

Is there room in today's high tech
information age for good, old fashioned geologic analogs?

Yes. And then some.

That's the finding of a study that asked 23 various
companies around the world just how important analogs are to the
modern geoscientist.

"We wanted to find out if the concept of geologic
analogs is still a favorable approach today and if people are just
using seismic data and well log information to do their interpretations,
or if we just don't have a handle on how people actually use analogs,"
said J.C. Wan, director of technology development with Houston-based
C&C Reservoirs.

C&C contracted with Quittitut Consulting to assess
the real world use and methodology of geological analogs in general,
and digital analog systems in particular.

The goal: To determine the merits and effectiveness
of the analog approach in exploration prospecting and field development.

Participants were six major oil companies, nine international
independents, two national oil companies, four domestic independents
and two independent exploration geologists, all covering six countries.

The results:

Two-thirds of the companies believe that
casting a global net to identify the highest quality analogs reduces
exploration risk and improves field development decisions.

One-third of companies favor more of a
"closeology" approach to evaluating plays and field development
options by looking only at nearby well, reservoir or field data.

While seismic is often a deciding factor,
a significant number of geologists believed analogs provide detail
and insight needed for successful exploration and field development.

"We were somewhat surprised that two-thirds of the
respondents felt global analog searches were still valuable," Wan
said. "We anticipated that people would be more focused on seismic
data as the primary tool."

He also said that the mix of participants -- predominately
majors and international independents -- likely accounts for this
result.

"The survey was somewhat skewed to international
players and majors, and international independents are going to
have more interest in the global look that analogs can provide,"
Wan said. "In frontier areas and emerging basins where there isn't
as much hard data, companies have to use the 'soft data' analogs
provided to mitigate risk."

However, Wan believes global analog studies can be
beneficial for domestic companies as well.

"For example, I was in Calgary recently where a geoscientist
with a company working on a western Canadian basin coalbed methane
project said analogs from a coalbed methane field in Australia had
provided important insights for his work," he said. "That's the
kind of value analogs can bring to domestic projects."

Other People's Knowledge

According to the study nearly all exploration and
production companies use analogs extensively both for exploration
and field development. An overwhelming majority of firms said analogs
are used in both arenas while a smaller portion of the respondents
indicated they use analogs in either exploration or development,
but not both.

Some of the interviewees said in almost every situation
they can apply other people's knowledge.

"They said it was rare to come up with an entirely
brand new idea, and in those rare occasions when a completely new
idea is advanced the risk factor automatically ratchets up," Wan
said. "So finding information on how a concept or idea has been
used in the past can definitely reduce risk."

The survey did indicate that age may play a role
in the use of analogs. A significant majority of respondents had
more than 20 years of experience, and that group generally valued
geological analogs as an important source of information.

"This group recognized that seismic data doesn't
tell the whole story and that geologic fundamentals are still important,"
Wan said. "The outcome of the study might be quite different if
a larger number of younger professionals were included."

Exploration and production management and professional
staff described the importance of geological analogs in various
ways. One response indicated that analogs provide risk reduction
via greater decision making certainty -- analogs give geologists
and reservoir engineers confidence that their ideas are grounded
in reality.

The survey participants also said that analogs:

Give explorationists insight on the critical
elements of a specific play that may be prospective.

Uncover subtle opportunities that may not
be apparent from other techniques or technology.

Improve predictive capabilities on the
upside development potential.

Help convince management, investors and
partners of the commercial viability of a prospect or merits of
a field development program.

Survey participants apparently found it difficult
to quantify how they use analogs.

"When we asked people which data played a major role
in their decision making and if they counted analogs as a key contributor,
the initial reaction was negative, but on more reflection they realized
analogs were more important than they realized," Wan said.

"It's hard to put a hard dollar figure on how much
money this kind of data can save, unlike 3-D seismic, for instance,
which people can quantify."

Other Findings

Survey responses also indicated:

Analogs are often used in new ventures
and international projects, but more people are beginning to use
them in mature basins for enhanced oil recovery techniques.

Analogs aren't just for geologists anymore.
Reservoir engineers and petrophysicists are starting to use analogs
to fill in the data gap.

Analogs are used in peer review meetings,
but are seldom part of look-back or post-mortem appraisals on
a project.

No one within the companies surveyed has
codified analog best practices.

Analogs appear to be used at about the
same rate today as 20 years ago, except today there is more detailed
data, there is more probabilistic analysis being done and seismic
is more often a deciding factor and the real driver in approving
projects.

"Today there is such a flood of information that
the challenge is not to find information on a specific field or
basin but to value rank the information," Wan said. "People have
to ask the fundamental question of how much information is enough?
When do you stop?

"At some point you are adding incremental value that
is not pushing a project forward," Wan continued. "That's the point
every oil company struggles with.

"Plus, inaccurate information is worse than no information,
so the key is to pinpoint the information you feel is accurate without
bias."

Many participants were concerned about
the "abuse" of the large amount of data in the digital world and
cited the inability to validity check or corroborate data -- particularly
when dealing with geological and reservoir information.

The quality of the analogs is more important
than the quantity -- a reliable and thoroughly studied analog
is far more useful than a large number of "case studies" that
have lots of empty data points and provide incomplete analysis.

Analog databases with search engines are
a valuable resource that can help geologists lower exploration
risk and help reservoir engineers make optimum development decisions.

In general, the interviewees favored the use of digital
analog systems because they provide quick and efficient information
to support decisions, they are much easier to manipulate and analyze,
and they make it easy to make global comparisons via high quality
analogs from fields and reservoirs around the world.